Market report: Tuesday close

Broker UBS has chosen to upgrade from neutral to buy and raised its 12-month target from 370p to 450p. Analysts will be looking for evidence that the revival in the international news agency and financial information systems supplier's fortunes have continued, with the focus on revenue growth.

UBS is also looking for improved earnings growth and says Reuters has the potential to increase the dividend or return excess capital to shareholders. It remains broadly optimistic about the media sector in 2005 following an uninspired past 12 months.

It has also raised its target for chocolate and soft drinks group Cadbury Schweppes from 465p to 510p and retained a neutral rating. The shares slipped 3¼p to 483p, a smidgen below their two-year high.

Share prices generally continued to drift lower. The FTSE 100 index closed 22 points lower at 4,818.7, undermined by heavy falls on Wall Street this afternoon.

US investment bank JP Morgan has begun coverage of information technology group LogicaCMG, down 5p at 197p, with a neutral rating and 195p target. The company remains strong in its home markets of the UK and Benelux but short-term sentiment is likely to focus on the loss-making German operations.

Manchester United touched 290p following a trade in just 100 shares, before the price rattled back to trade 2¼p cheaper at 26¾p.

Music retailer HMV closed unmoved on 251¼p ahead of results next week. Broker Numis Securities has repeated its reduce rating and cut its target from 254p to 225p. It has also lowered its pre-tax profit estimate for the current year from £131mto £125m and for next year from £138m to £134m.

Next came off the boil, falling 3p to 1600p, which is a major support level, say chart followers. That could be bad news for the directors, who have taken a bet on the shares and stand to double their money if the price tops 2000p.

There was heavy turnover in Woolworths with more than 20m shares changing hands as the price firmed 1p to 38p. There is some talk about a takeover of the chain by a private equity outfit.

Northern Foods dipped ¾p to 163¾p following yesterday's profits warning. US securities house Goldman Sachs has cut its earnings estimate for 2005 by 9% to 12.5p a share and for 2006 by 12% to 12.8p while rival Deutsche Bank has downgraded from buy to hold.

UBS says that while the ready meals group's dividend commitment is commendable, it may be increasingly difficult to defend. Northern blamed the setback on troubles at its main customer, Marks & Spencer, up 1½p at 346¼p.

Shares in white-van hire group Northgate were driven up close to their all-time highs, 11½p better at 846½p, after a 23% acceleration in half-year profits to £27m. The company is also revving up the dividend by increasing the interim payout 14% to 8p.

Cozart, the Aim-listed company that provides the police with its RapiScan testing kits to detect crack, heroin and cocaine in saliva, is confident of sales opportunities for its devices in the workplace and for use on drivers in Britain and on the Continent. Sales for the six months to 30 November rose 31% to £2.5m, more than doubling pretax profits to £196,000. The shares added 2½p to 41½p.